Another Subsidy for Coal?

Every month SaskPower charges any generator $3,822, per megawatt of installed generating capacity, for the right to be connected to and to transmit power over, the Saskatchewan power system. The charge is called the Open Access Transmission Tariff (OATT) and details are contained in a lengthy document on SaskPower's web site. Conceptually, at least, the charges are the same for all generators.

But the reality is very different. Although, as mentioned, the OATT charge is levied based on the installed capacity, different generators generate more or less, from the same installed capacity. The number of units of electricity generated from a single unit of generating capacity is termed the 'capacity factor'. A capacity factor of 100 percent means that a generator runs every hour of the day and every day of the year. A capacity factor of 0 percent means that a generator never operates at all throughout the year.

The following table shows that coal has the highest capacity factor in Saskatchewan (77.8 percent) and wind the lowest (37.2 percent).

Source: SaskPower 2013 Report and Accounts

The significance of these different capacity factors is that every unit of electricity from a wind turbine has to pay a connection and balancing charge that is more than double that paid by coal.

And to put that in perspective: those SaskPower charges would eat up about 17 percent of the gross revenue of each of the wind projects that we are trying to pursue. For comparison: SaskPower charges for a coal-fired power project of the same size would be consuming only about 8 percent of gross revenue. The difference between the two is a massive amount and represents the difference between a profitable and an uneconomic project.

Yet another way in which wind energy is effectively excluded from the Saskatchewan electricity system. Perhaps this is something else which SaskPower will consider reforming in due course.